Why did convertible bonds perform poorly in 2008 and then perform very well in 2009? Why did

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Why did convertible bonds perform poorly in 2008 and then perform very well in 2009?

Why did convertible arbitrage strategies do poorly in 2008?

We have the following information:

Conversion ratio= 50

Current stock price is 16 dollars per share.

Convertible bond is currently trading at 1000.

Coupon on the convertible bond is 6.0%.

Straight value of bond= 800

Calculate the conversion value, value of the option embedded in the convertible bond, and the market conversion price.

Related Book For answer-question

Financial Accounting and Reporting

ISBN: 978-0273744443

14th Edition

Authors: Barry Elliott, Jamie Elliott

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Posted Date: Mar 29, 2023 12:59 AM

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Why did convertible bonds perform poorly in 2008 and then perform very well in 2009? Why did

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Financial Accounting and Reporting

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